Published: Monday, February 11, 2013 at 12:46 p.m.

Last Modified: Monday, February 11, 2013 at 12:46 p.m.

LAKEWOOD RANCH - A Broward County Circuit Court jury has levied a $6 million judgment against FCCI Commercial Insurance Co. for breaching a contract and maliciously prosecuting the owners of a Pompano Beach-based woodworking company, Custom Wood Creations Inc.

The jury award includes $4.8 million in compensatory damages and $1.2 million in punitive damages.

During a three-week trial that ended last week, jurors were told that Lakewood Ranch-based FCCI refused to fully pay a claim for damage suffered during 2005's Hurricane Wilma to the husband-and-wife team who owned Custom Wood Creations.

FCCI instead sought to implicate one of the victims, Debra Peters, with insurance fraud. FCCI's special investigations unit filed false and incomplete information with the Florida Department of Financial Services insurance fraud unit, the suit alleged.

Criminal charges alleging insurance fraud were filed against Peters, who was arrested and spent 16 hours in jail, according to Schlesinger Law Offices, which won the case on contingency basis for the Peters family.

The criminal case against Peters was dismissed in April 2008 for lack of evidence.

FCCI senior vice president Cina Welch said the company is "disappointed in the verdict. But, nonetheless, we continue to have faith in the judicial system, and our focus is on settling claims fairly and ethically for our policyholders and claimants.

"Our reputation is paramount to us, so we will consider appealing the verdict," Welch said.

An appeal could stretch the final settlement of the case by 18 months to three years.

Welch declined to comment on the particulars of the case, citing the possibility of an appeal.

Founded as a workers' compensation insurance company in Sarasota in 1959, FCCI now writes multiple lines of commercial property and casualty insurance and has 17,000 policyholders and more than $1.75 billion in assets.

FCCI employs 680, including 375 at its Lakewood Ranch headquarters.

Like most insurance companies, FCCI has its own internal fraud investigators. The FCCI Special Investigations Unit "is highly skilled and trained to quickly identify and aggressively combat fraud," the FCCI website states.

But in this case, the jury said the unit went too far.

"The central thesis of the case was that the SIU, ostensibly designed to root out fraud, had actually been subverted to an ulterior purpose, which was that of a profit center," said Scott P. Schlesinger, the couple's attorney.

FCCI had paid a partial claim of $343,000 after Hurricane Wilma tore the roof off the family's manufacturing plant and damaged valuable machinery, the couple's attorneys said.

But then, instead of paying the rest of the $1 million claim, FCCI's special investigations unit sought to get the first check back. Representatives of the unit contacted a detective at the Florida Department of Financial Services and asked the agency to investigate Debra Peters for insurance fraud, the suit alleged.

At first, the state's detective said there were not enough grounds. But emails revealed in the trial showed FCCI's special investigations unit prompted the underwriter on the policy to beef up his affidavit.

"The underwriter, relying on what SIU told him, said it was fraud in the application, and had they known, they never would have written the policy," Hammer said.

That amended affidavit allowed the state detective to file the insurance fraud case against Peters, which was then prosecuted by the Broward County State Attorney's office.

"That was the core of this case, that the SIU for FCCI was driving this investigation, pushing it, and caused this woman to get arrested. And it was all to save money so they didn't have to pay the claim," said Steven J. Hammer, the Schlesinger firm's lead attorney on the case. "For the next year, she had to face court charges that could have put her in prison for up to 30 years."

As part of its punitive damages jury form, the six-member jury said that FCCI not only intended to harm Debra Peters, but that the company was motivated "solely by unreasonable financial gain."

<p><em>LAKEWOOD RANCH</em> - A Broward County Circuit Court jury has levied a $6 million judgment against FCCI Commercial Insurance Co. for breaching a contract and maliciously prosecuting the owners of a Pompano Beach-based woodworking company, Custom Wood Creations Inc.</p><p>The jury award includes $4.8 million in compensatory damages and $1.2 million in punitive damages.</p><p>During a three-week trial that ended last week, jurors were told that Lakewood Ranch-based FCCI refused to fully pay a claim for damage suffered during 2005's Hurricane Wilma to the husband-and-wife team who owned Custom Wood Creations.</p><p>FCCI instead sought to implicate one of the victims, Debra Peters, with insurance fraud. FCCI's special investigations unit filed false and incomplete information with the Florida Department of Financial Services insurance fraud unit, the suit alleged.</p><p>Criminal charges alleging insurance fraud were filed against Peters, who was arrested and spent 16 hours in jail, according to Schlesinger Law Offices, which won the case on contingency basis for the Peters family.</p><p>The criminal case against Peters was dismissed in April 2008 for lack of evidence.</p><p>FCCI senior vice president Cina Welch said the company is "disappointed in the verdict. But, nonetheless, we continue to have faith in the judicial system, and our focus is on settling claims fairly and ethically for our policyholders and claimants.</p><p>"Our reputation is paramount to us, so we will consider appealing the verdict," Welch said.</p><p>An appeal could stretch the final settlement of the case by 18 months to three years.</p><p>Welch declined to comment on the particulars of the case, citing the possibility of an appeal.</p><p>Founded as a workers' compensation insurance company in Sarasota in 1959, FCCI now writes multiple lines of commercial property and casualty insurance and has 17,000 policyholders and more than $1.75 billion in assets.</p><p>FCCI employs 680, including 375 at its Lakewood Ranch headquarters.</p><p>Like most insurance companies, FCCI has its own internal fraud investigators. The FCCI Special Investigations Unit "is highly skilled and trained to quickly identify and aggressively combat fraud," the FCCI website states.</p><p>But in this case, the jury said the unit went too far.</p><p>"The central thesis of the case was that the SIU, ostensibly designed to root out fraud, had actually been subverted to an ulterior purpose, which was that of a profit center," said Scott P. Schlesinger, the couple's attorney.</p><p>FCCI had paid a partial claim of $343,000 after Hurricane Wilma tore the roof off the family's manufacturing plant and damaged valuable machinery, the couple's attorneys said.</p><p>But then, instead of paying the rest of the $1 million claim, FCCI's special investigations unit sought to get the first check back. Representatives of the unit contacted a detective at the Florida Department of Financial Services and asked the agency to investigate Debra Peters for insurance fraud, the suit alleged.</p><p>At first, the state's detective said there were not enough grounds. But emails revealed in the trial showed FCCI's special investigations unit prompted the underwriter on the policy to beef up his affidavit.</p><p>"The underwriter, relying on what SIU told him, said it was fraud in the application, and had they known, they never would have written the policy," Hammer said.</p><p>That amended affidavit allowed the state detective to file the insurance fraud case against Peters, which was then prosecuted by the Broward County State Attorney's office.</p><p>"That was the core of this case, that the SIU for FCCI was driving this investigation, pushing it, and caused this woman to get arrested. And it was all to save money so they didn't have to pay the claim," said Steven J. Hammer, the Schlesinger firm's lead attorney on the case. "For the next year, she had to face court charges that could have put her in prison for up to 30 years."</p><p>As part of its punitive damages jury form, the six-member jury said that FCCI not only intended to harm Debra Peters, but that the company was motivated "solely by unreasonable financial gain."</p>